Malaysia to Roll out Nationwide B15 Biodiesel Blend from June

May 29, 2026

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(Biofuels International) Malaysia has confirmed that its new B15 biodiesel blend — a fuel mixture containing 15 per cent palm‑based biodiesel and 85 per cent petroleum diesel — will be introduced across the entire transportation sector from 1 June.

This marks a significant step in the country’s long‑term strategy to reduce reliance on conventional fossil fuels while strengthening the domestic palm oil industry.

The nationwide adoption of B15 follows earlier phases in which lower‑percentage blends, such as B10, were gradually introduced in selected regions and sectors. By moving to B15, Malaysia aims to cut carbon emissions, promote cleaner air quality, and support its commitments to sustainability.

The government has emphasised that the transition will be carefully managed to ensure compatibility with existing diesel engines, with ongoing testing and industry consultations already under way.

Transport operators, logistics companies, and fuel retailers are expected to begin preparations well ahead of the implementation date. Authorities have also indicated that public awareness campaigns will be launched to help motorists understand the benefits and practical implications of the new blend.

This shift positions Malaysia as one of the leading adopters of biodiesel in the region, reflecting both environmental ambition and economic strategy. READ MORE

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Malaysia’s B15 biodiesel rollout from June 1 aimed at strengthening national energy security — minister (OilWorld/UkrAgroConsult)
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Malaysian B15 biodiesel rollout to begin 1 June (Oils & Fats International)
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Malaysia expands bioenergy push with b15 biodiesel rollout, says palm oil exports will remain unaffected (BioEnergy Times)
Malaysia expands B15 biodiesel rollout as several regions advance to B20 blend (BioEnergy Times)
Malaysia’s palm oil sector faces El Niño yield hit as B15 mandate lifts demand (S&P Global)
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Excerpt from OilWorld/UkrAgroConsult: The rollout does not require major upgrades to existing infrastructure and can be implemented in the near term. At the same time, B20 biodiesel programs are already operating in several regions, including Sarawak, Labuan, and Langkawi.

To support the expansion of the B20 program, the government has already allocated 42 million ringgit for infrastructure upgrades. In addition, the Ministry of Plantation and Commodities has requested another 56 million ringgit to modernize fuel distribution terminals, particularly in the Klang Valley area. Authorities view the broader use of biofuels as part of the country’s long-term energy transition strategy.

Malaysia’s national biodiesel program began in 2011 with the launch of the B5 mandate for the transport sector. The country later expanded to B7, B10, and B20, and is now preparing for broader implementation of B15. B10 biodiesel contains 10% palm methyl ester (PME) and 90% petroleum diesel, while B20 includes a 20% biofuel component.

The introduction of B15 is expected to raise domestic palm oil consumption to around 0.8 million tonnes per year, compared to 0.53 million tonnes under the B10 program. Full implementation of B20 in the future could increase domestic palm oil demand to more than 1 million tonnes annually, helping support smallholder incomes and stabilize the local market.

In the longer term, Malaysia aims to introduce the B30 standard for land transport by 2030. The government believes the development of the biodiesel industry will become a key element of the country’s energy transformation and help reduce carbon emissions while supporting the strategically important palm oil sector. READ MORE

Excerpt from Truck & Bus: Since Iran’s closure of the Strait of Hormuz in late February, diesel prices have risen. As a result, operating costs for transport industry operators have increased by 25-40 per cent.

While the diesel subsidy means fleet operators can purchase diesel at RM2.15 per litre, there is a 900 to 5,000 litres quota per month per vehicle. This means that with biodiesel readily available, operators can purchase extra fuel for a lower price of RM4.50 per litre whenever necessary. READ MORE

Excerpt from Oils & Fats International: Deputy Prime Minister Dr Ahmad Zahid Hamidi said the move, which would be implemented in stages, was crucial to help stabilise fuel prices in the country.

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“We are doing this in phases to ensure that crude palm oil (CPO) prices will not burden biodiesel production costs.”

Large-scale production was expected to reduce operating costs and lower overall fuel prices, he added.

Hamidi said biodiesel had already undergone capability testing for use in vehicles and had strong potential to stabilise and reduce diesel prices over the long term.

“There are 19 biodiesel production plants ranging from B15 to B50. We will utilise sludge or by-products from CPO production, where about 35% of the sludge will be fully used to produce biofuel and Jet A1 fuel,” he added. READ MORE

Excerpt from The Star: “The implementation of B15 is a strategic step by the government in strengthening the country’s energy security by reducing dependence on imported fossil diesel, while promoting the use of more sustainable and environmental-friendly alternative energy sources,” Plantation and Commodities Minister Datuk Seri Dr Noraini Ahmad said in a briefing yesterday.

She added that there are currently 34 blending depots across the country to support the rollout.

The minister said the government has also approved an allocation of RM42mil for the first phase of facility upgrades towards the implementation of B20 in Sarawak.

For the second phase, the ministry is requesting an additional allocation of about RM56mil to upgrade distribution terminals, particularly in the Klang Valley Distribution Terminal area, she said.

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The blending assets will be owned by the Malaysian Palm Oil Board and operated by oil companies with retail operations.

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Industry expert Joseph Tek said the higher blend rates provide support to CPO prices and farmer incomes.

“CPO prices are no longer being held up by sentiment alone. The support looks more structural now.

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“When crude oil strengthens, biodiesel becomes more attractive, especially for countries looking at energy security, import substitution and rural income,” he told StarBiz.

He added that the push from B40 towards B50 in Indonesia and Malaysia’s move from B10 towards B15 were not small footnotes.

They create real additional pull on palm oil demand and are also why CPO in the RM4,000 to RM4,500 a tonne price range may stay firmer for longer than many expect, he forecast.

“But food inflation, subsidy costs, policy intervention and affordability will always act as brakes.

“The plate and the tank do not always dine peacefully together,” he noted. READ MORE

Excerpt from BioEnergy Times: Plantation and Commodities Minister Noraini Ahmad said the expansion of bioenergy production through higher biodiesel blending is part of the government’s strategy to enhance energy security, reduce dependence on imported fossil fuels and accelerate the transition toward cleaner energy sources, The Vibes reported.

Speaking at a media briefing on the B15 Biodiesel Implementation, Noraini said Malaysia’s annual palm oil production of around 20 million metric tonnes is sufficient to support both bioenergy requirements and export demand.

Of the total output, about 16 million metric tonnes are exported, while the remaining four million metric tonnes are consumed domestically. She noted that only around 0.8 million metric tonnes would be needed annually for the B15 biodiesel programme, leaving export volumes unaffected.

According to the minister, studies conducted by the government and consultations with industry stakeholders confirmed that the B15 target could be achieved without reducing palm oil exports or requiring major upgrades to existing facilities.

The Cabinet and the National Economic Action Council approved the increase in biodiesel blending rates as part of efforts to strengthen the country’s renewable energy capacity and reduce exposure to fluctuations in global fuel markets, particularly amid geopolitical tensions in West Asia.

Under the new mandate, diesel sold in the transport sector will contain 15 percent palm-based biodiesel and 85 percent petroleum diesel. Malaysia currently operates under a B10 biodiesel programme for transportation fuels. READ MORE

Excerpt from S&P Global:

El Niño threatens palm oil yields in 2026-27

B15 biodiesel mandate boosts domestic demand

Ending stocks fall to 2.56 million mt in 2026-27

Malaysia's palm oil industry is heading into a tighter supply-demand balance in marketing year 2026-27 (October-September) as El Niño-linked dry weather threatens fresh fruit bunch yields just as the country ramps up its B15 biodiesel mandate, according to a new US Department of Agriculture oilseeds and products update.

The report, released July 1, 2026, warns that MY 2026-27 palm oil production is expected to moderate after strong output in MY 2025-26, with policy-driven biodiesel demand set to absorb more of the available supply and slow stock accumulation. READ MORE

Excerpt from UkrAgroConsult: Lower fresh fruit bunch production is also expected to reduce output of palm kernel oil and palm kernel meal. With less raw material available for processing, production across the palm kernel sector is projected to decline slightly compared with the previous marketing year.

Government biofuel policy will provide additional support for domestic demand. Following the transition from B10 to B12, Malaysia introduced the mandatory B15 biodiesel blend on Peninsular Malaysia on June 1, 2026. According to the Malaysian Palm Oil Board (MPOB), the move to B15 alone is expected to increase annual palm oil demand by approximately 204 thsd tons.

The USDA forecasts Malaysia’s domestic palm oil consumption at 4.59 mln tons in the 2026/27 marketing year, up 330 thsd tons from the previous season. Food consumption is expected to remain relatively stable at around 950 thsd tons, with most of the increase coming from biodiesel production.

Despite lower production and stronger domestic demand, Malaysia is not expected to face a supply shortage. However, ending stocks are projected to decline from 2.8 mln tons in 2025/26 to 2.56 mln tons in 2026/27. To balance the market, palm oil imports are forecast at 550 thsd tons, while exports are expected to remain strong at around 15.9 mln tons.

India, China, and Kenya are expected to remain the key destinations for Malaysian palm oil exports. According to the USDA, Malaysia’s exports will continue to benefit from palm oil’s price advantage over soybean oil, although the gap with soybean oil from Argentina and Brazil has narrowed, increasing competition in the global vegetable oil market. READ MORE